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Rochester Top 100: D4 mastered the move from paper records

Rochester Business Journal
May 24, 2013

See correction below:

In the years since its founding in 1997, D4 LLC has evolved from a local company that dealt largely with paper records to a master of digital technology operating nationally.
 
A provider of litigation support services, the Rochester firm now manages electronic discovery, does computer forensics and provides scanning services to law firms and corporations.
 
As of December 2012, D4 employed 118 people, up from 87 in 2011 and 84 in 2010. The firm has had double-digit revenue growth in each of the past three years-16.2 percent in 2010, 39.9 percent in 2011 and 36.5 percent in 2012, when it ended the year with $14.3 million in revenues.
 
CEO John Holland expects such growth to continue as corporate records and communications increasingly migrate from paper to electronic media. He anticipates that the company's greatest growth will come in predictive coding.
 
Predictive coding, an emerging discovery technology that automates the laborious process of sifting through documents to see which might be relevant to court cases, uses software that learns to discern which documents are relevant to a legal dispute by extrapolating from choices made by lawyers who start the document review process.
 
D4 is hardly alone in its field, and many rivals are far larger. Competitors include Kroll Ontrack Inc., a 2,800-employee Minnesota firm that operates worldwide. The accounting giants KPMG LLP and Deloitte LLP also have large electronic discovery units.
 
Still, D4 has carved a niche in the burgeoning e-discovery market, employing what Holland calls a hub-and-spoke approach to establish branches in key U.S. markets, allowing it to deploy on-site personnel to clients as needed.
 
"Over the past few years, we've expanded largely through strategic acquisitions," Holland said.
 
The firm's growth came with one major hiccup.
 
Holland founded the company as DocuLegal, providing scanning services to area law firms and companies to digitize paper records and documents. Within its first few years, the business prospered enough to warrant the opening of Buffalo and Syracuse offices, although the Syracuse branch lasted less than a year. The firm began to move into data-centered services in 2005.
 
In 2008, DocuLegal, which had begun to attract suitors, was acquired by a North Carolina-based litigation support company, Ivize LLC. The match went sour two years later as Ivize faltered. In 2010, Holland extricated his firm from Ivize, rebranded the Rochester company as D4 and merged with Layer One, a locally based document-scanning company.
 
Now with headquarters in its own Andrews Street building, where it has installed a high-security Tier 3 data center, D4 offers clients cloud-based as well as on-site services.
 
D4 has offices in 11 U.S. cities, including New York, Denver, San Diego and San Francisco. It has Florida branches in Tampa and Orlando, Nebraska offices in Lincoln and Omaha and a branch in Grand Rapids, Mich.
 
The company initially worked almost exclusively for law firms. Over the past few years, it has tweaked its client base, striking subscription deals with national corporations, Holland said.
 
Companies such as Bausch & Lomb Inc., Jabil Circuit Inc., Whirlpool Corp. and Eastman Kodak Co. agree to use D4 exclusively for litigation services, instructing any outside law firms they hire to use D4 during legal battles. Subscription clients pay a flat, negotiated annual fee.
 
With more than 600 lawyers, Nixon Peabody LLP has an in-house litigation support department. Still, it uses D4 locally and nationally for backup services and extensively for document scanning, said Carolyn Nussbaum, managing partner of Nixon Peabody's Rochester office.
 
D4's expertise and professionalism is on a par with its larger rivals, and in service and responsiveness it is unmatched, Nussbaum said.

The Rochester Top 100 program is presented by the Rochester Business Alliance Inc. and KPMG LLP. Launched in 1987, it recognizes the fastest-growing private companies in Greater Rochester. This year's Rochester Top 100 event will be held Nov. 6. For more information, go to rochesterbusinessalliance.com.5/24/13 (c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.

Correction and clarification
A May 24 article misstated some facts and was unclear on some aspects of D4 LLC's corporate history. D4 was created in 2005 as a subsidiary of DocuLegal LLC, which was founded in 1997. DocuLegal and D4 were acquired in 2008 by Ivize LLC, which went bankrupt five months later, requiring DocuLegal and D4 to regain ownership of themselves as secured creditors. Agreements to do litigation-related services between D4 and companies including Bausch & Lomb Inc., Jabil Circuit Inc., Whirlpool Corp. and Eastman Kodak Co., are not exclusive. D4 acquired the media management firm Layer One Media LLC in 2010.

5/31/13 (c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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